Osaka Gas believes US will soon approve Freeport LNG exports to Japan

Osaka Gas and Chubu Electric Power Co. recently signed a 20-year contract with Freeport LNG Development to import up to 2.2 million tpy each of LNG from Freeport's facility on the US Gulf Coast. The facility is slated to start operations in 2017. The Freeport contract will be effective once the US grants a license.

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By MARI IWATA

TOKYO -- Osaka Gas Co. is confident that it will be allowed to
import liquefied natural gas to the Japan from the Freeport project in Texas, a company
executive said Monday.

Osaka Gas and Chubu Electric Power Co. signed
in August last year a 20-year contract with Freeport LNG
Development to import up to 2.2 million tpy each of LNG from
Freeport's facility on the US Gulf Coast.

The facility is slated to start operations in
2017.

The question of whether the US Department of
Energy will approve the agreement has been of investor interest
because the department said last year it wouldn't approve any
plans to ship LNG to countries without a free-trade agreement
with the US until it completed a review of natural gas
shipments, including whether they will help create US jobs and
offset trade imbalances.

"How much LNG the DOE will approve to export
is an issue. But we are at the top of the line waiting for
screening by DOE, in a position sure to get an approval,"
Koichiro Age, a general manager at Osaka Gas's LNG trading
department, told Dow Jones Newswires.

A study commissioned by the DOE said in
December that natural gas exports would benefit the US economy,
leading to net economic gains that would outweigh the downside
resulting from higher natural gas prices.

The DOE has invited the public to provide
comment on the report in relation to 15 applications pending
approval to export LNG from the US. The report and resulting
comments will be taken into consideration when the department
makes its decision in each case.

"We expect DOE will start the process soon
after the public comment period is closed in late February,"
said Mr. Age.

The Freeport contract will be effective once
the US government grants a license to export LNG to Japan.

Several LNG projects have sought the DOE's
approval to ship their output overseas. So far only Cheniere
Energy has received all the necessary permits to export from a
terminal in Louisiana to countries that do not have free-trade
agreements with the US, mostly in Asia, which are the biggest
buyers of LNG.

The list of applicants include Freeport LNG in
Freeport, Texas, partly owned by ConocoPhillips and Dow
Chemical; Golden Pass LNG near Sabine Pass, Texas, a project backed by ExxonMobil and
Qatar Gas; and Cameron LNG in Cameron Parish, La., owned by
Sempra Energy.

Dow Jones Newswires

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So Dow is on both sides of this arguement. They want to sell Natural gas themselves through freeport LNG as the middlemen but want the government to prevent the direct sale of natural gas overseas from the producers!

Steve Jackson (DOW Chemical Operator)01.21.2013

I believe exporting LNG will be ok as long as it doesn't influence the price that my employer has to pay for LNG. That in turn would cause loss of jobs here in the US and, more specificaly DOW, that would affect my employement and pay. I'm all for what makes the US more financially healthy but don't hurt the little guys in the process.